Back in 2014, Kairat Kelimbetov, then-head of Kazakhstan’s National Bank suggested that Bitcoin could be “a form of financial pyramid scheme.” The common belief among Kazakhstani officials was that cryptocurrencies could undermine the country’s already struggling tenge.

The tenge absolutely was struggling, though.

Nearly 80 percent of the Kazakhstan National Bank’s reserves, deposited from customers, are not kept in tenge, the country’s national currency. Though the number is lower for businesses, the fact that most of the bank’s reserves are in dollars, euro, and other currencies is not encouraging for the country’s national currency. Even still, with the tenge having fallen over 70% between 2008 and 2014 due to rampant corruption and low oil prices, media rumors of a BTC ban were circulating the Central Asian nation throughout 2014.

Things began to change, however, and as cryptocurrencies increased in popularity and other countries began to relax their positions, the Kazakhstan government followed suit. The Kazakhstani even saw their first BTC ATM in late 2015. Seeing the need for change, the government began the race to regulate cryptos in 2016, allowing the National Bank “leverage to monitor the situation,” according to Daniyar Akishev.

In June 2017, Kazakhstan announced plans to begin selling blockchain based bonds. The idea was to provide investors with a low-cost, commission-free, and speedy medium for purchasing bonds. While not necessarily a new idea, it was a landmark event for Kazakhstan in the blockchain race.

Showing an even greater commitment to the government’s efforts to adapt to the technology taking root across the world, President of Kazakhstan Nursultan Nazarbayev announced that “It is high time to look into the possibility of launching the international payment unit. It will help the world get rid of monetary wars, black-marketeering and decrease volatility at markets,” at the 10th Astana International Forum (AIF). According to Nazarbayev, “All countries should be represented there equally. This is a difficult question but it should be solved.” This signaled a distinct shift in ideology from officials’ 2014 decry of the subject.

Supportive cryptocurrency regulation in Kazakhstan

From that surprising announcement, a fresh movement was seemingly born. In mid-July, working with Deloitte, Kesarev Consulting, Waves Platform, and legislation firm Juscutum, the Astana International Financial Center (AIFC) announced that the coalition would be working together to develop supportive cryptocurrency regulation in Kazakhstan. “We consider this project as a perfect opportunity to create a new jurisdiction, which would be most favorable for crypto projects in the world”, said Head of Juscutum, Artem Afyan.

Kazakhstani officials clearly recognize the need to adapt to the rapidly changing techno-economic environment, and there’s no lack of enthusiasm from the trading population either. Kazakhstan’s move to become the world’s second government to regulate cryptocurrencies puts it on track to become a hub for crypto-startups, blockchain businesses, and ICOs. The financial implications of this move could prove to be more than beneficial to the nation’s struggling economy.

But Kazakhstan is not the only country in Eurasia to catch the Bitcoin bug. Belarus has recently approved the use of blockchain technology for its securities market, while Poland last year promoted an idea to move to a cashless economy favorable to blockchain-based security systems. Even Ukraine has lofty goals involving cryptocurrency.

The blockchain race is on, and those who act fast and efficiently could emerge as leaders in the crypto-revolution.

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